Bloomberg News

Companies That Aid Syria Crackdown Deserve Sanctions’ Slap: View

November 15, 2011

Nov. 14 (Bloomberg) -- Terrible things tend to happen when Syrian security officials catch their quarry. Dissidents are detained, tortured and sometimes killed.

It is thus disturbing to learn that U.S. and European technology companies are working to help the regime of President Bashar al-Assad monitor Internet traffic to keep tabs on citizens. A Bloomberg News investigation revealed that the Italian company Area SpA has been installing a wide-reaching surveillance system for the Syrians, using equipment from the U.S. company NetApp Inc., France’s Qosmos SA and Germany’s Utimaco Safeware AG.

Selling such wares to Syria, which has been under the dictatorial rule of the Assad dynasty for four decades, would be reprehensible at any time. It is especially so in the face of the regime’s brutal response to mostly peaceful protests that began in March. An estimated 3,000 people have died in unrest, uncounted thousands have been arrested and more than 90 have died in custody, amid widespread reports of detainees, including children, being beaten, burned, electrocuted and otherwise abused.

In a 13 million euro ($17.9 million) deal, the privately held Area, based outside Milan, agreed to install a system it calls Asfador to enable the Syrian regime to monitor all Internet traffic. Asfador includes the capability to intercept, scan and catalog virtually all e-mail flowing through Syria, according to Bloomberg’s Ben Elgin and Vernon Silver. The software and hardware for archiving e-mail came from NetApp, a Sunnyvale, California-based company with a market value of about $15 billion and more than 10,000 employees.

The U.S. has banned virtually all exports to Syria, apart from food and medicine, since 2004. NetApp says it does not know if or how its products arrived in Syria. The company’s Italian subsidiary sold the material through an authorized vendor in Italy, which then resold it to Area, according to a person familiar with the project. However, e-mail records suggest that at least some NetApp employees probably knew who the end-user was. Bloomberg has seen copies of e-mail messages between Italian employees of NetApp and workers from Area discussing how to configure the product after it was delivered to Syria.

Measures exist to deal with the NetApp case -- they just need to be put in place. Three U.S. senators have asked the State and Commerce departments to investigate the company for sanctions busting and have proposed suspending all U.S. government work with the company pending a conclusion of the inquiry. Both are appropriate actions. NetApp has received U.S. government contracts worth more than $111 million since 2001, including one on Sept. 15. The State Department is also looking into reports that technology made by another Sunnyvale-based company, Blue Coat Systems Inc., is being used by Syria to censor the Internet.

There are limited mechanisms for dealing with the European companies. European Union sanctions against Syria ban arms sales and freeze the assets of Syrian officials, but do not regulate the technology and hardware used in the Asfador project. Although Utimaco has pleaded ignorance to how its products were being used, Area has said it is considering backing out of its contract with Syria, and Qosmos has said it will do so.

These are not matters to leave to the companies. The EU should tighten its Syria sanctions to bar at least the sale of surveillance technologies.

The U.S., which bars federal agencies from doing business with companies that export to Iran any technology used to disrupt, monitor or restrict the speech of Iranians, should expand the prohibition to cover Syria. Utimaco and its parent Sophos Inc. have received U.S. government contracts worth roughly $500,000 since 2000. The two other European companies in the Asfador deal have not had dealings with U.S. agencies. Still, the prospect of being on a U.S. government blacklist can influence a company’s behavior.

Skeptics may point out that, if cut off from U.S. and European suppliers, the Syrian government would undoubtedly look to Asian, especially Chinese, companies for its surveillance needs. Yes, the regime might eventually find comparable systems. But, considering the examples of Tunisia, Egypt and Libya, it might not last that long.

--Editors: Lisa Beyer, Tobin Harshaw

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To contact the Bloomberg View editorial board: view@bloomberg.net.


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